Hoarding is exactly what the government is doing right now by filling the SPR, and frankly it's the best thing that could happen. It drives prices up. High prices encourage demand destruction. They also finance new well development. The hoarded oil gives us a buffer to fall back on once shortages become more prevalent. High prices are what we need in order to adapt to what's coming, and the sooner they happen, the better.
Posted: Fri May 09, 2008 4:12 pm Post subject: Re: Americans to be banned from overseas oil trading
JohnDenver, I'm sorry if I mis-typed, I am agreeing with you about your views on how a small number of investors/speculators can manipulate the market. Threadbear is also right.
I think Linda Rafield has started all of this:
Quote:
"This appears to me to be computer-generated buying," said Linda Rafield, senior oil analyst at Platts, the energy research arm of McGraw-Hill Cos. Some investors use software that buys automatically when prices rise to certain levels; Thursday's record settlement may have triggered a flurry of electronic buy orders.
"There is no fundamental news out to cause this market to move like this," Rafield said
Just Google "Linda Rafield" and you can find this same comment in a number of different articles.
About Government Regulations: We need them, period. How about we make murder legal? How about speed limits? Anyone who thinks that the US has "too much" government regulations and interventions, please move to Zimbawe or anywhere else in some 3rd world country...they don't have a lot of government breathing down your back as long as you have $$, hell you can even get into the Human Slave Trade too if you like (anyone who thinks that Slavery does not exist in the world needs to get their head out of the sand).
Once again, follow the money. As mentioned previously, when there is a trade there is a buyer and seller. Someone is going to lose, right?
Here's why: In an inflated Bull Market, the last guy who is selling is probably selling at a profit so the "loser" is going to be the last guy to buy. When the music stops, the bubble bursts. Once the bubble (price bubble, not supply) bursts whoever is holding Call contracts in excess of the spot price is going to lose their open interest money (margin maintenence) or won't be compensated for the contracts that were purchased. Sound kind of familiar to anyone in the Real Estate Market? Short term contracts (aka Adjustable Rate Mortgage) are a gamble or at best "insurance". Sure they are great when things are moving in the upward direction but as the saying goes, "what goes up must come down", hence our "Peak [fill in the blank]" theory. Remember all the talk about reforming the Mortgage Industry? Only thing that I know is that the banks aren't lending as much anymore. This is just more of the same.
Now, with that said, who is really making the money? The exchanges...they get a fee no matter what happens. Anyone who plays poker knows that the Casino takes a "Rake". This is the "fee" that the Casino "charges" the players at the table for use of their facility and furnishings. It doesn't matter who is the winner, as long as they get their's. I have a friend who is a "bookie" and he doesn't care what his clients bet on...if they lose the "juice" starts running and he makes 10%. He tells me that all I need is about 3 clients who bet a lot and I can quit my day job. He relies on his clients to lose money! Money makers don't care how...just make it.
Funny thing is that the NYMEX stock (NMX) is down from it's inception: From $132.99 down to $93.04 today in spite of profits and growth.
Here is a story from 12/07 that WSJ had posted about NYMEX's 87% increase in contracts from the same time 1 year ago.
I don't know about you, but if GM had an increase of 87% in sales (and assuming profit too) wouldn't everyone on Wall Street buy GM stock and make the price go up? Why NMX stock hasn't taken off is beyond me, their profit margin is 33.28%. Google's profit margin is 24.89% and their stock is $500+.
I don't think this whole mess is the work of just one individual or small group (manipulation). Tt's the culimination of de-regulation and an overabundance of wealth. Don't get me wrong, I'm all about business, I own my own business but we as reasonable humans should think twice about the "necessities" of life. People are dying of starvation as we speak (and eat our steaks and potatoes) aroung the world not because of a shortage of food but because of the shortage of "money" to purchase it.
Perhaps this is the evolutionary process where only the strong survive, but is this the road that we want to go down? Imagine the next evolution of man: Average IQ is 145, height 6', weight 200lbs. Sorry to say but Hitler had the right "Idea", just not the right approach. It is proven that through selective breeding we are able to speed up the evolutionary process. Perhaps there will be two sets of the species, homo sapien and homo suprasapien. Perhaps the former will be enslaved (in a matter of speaking) by the latter. If peace begets peace, doesn't greed beget greed?
Someone mentioned that "greed" is not against the law, that is not true, there are government limitations everywhere in our lives that try to "control" greed. Can't have more than one wife, right? Can't be "greedy" and have two (or more).
Nature is based on "greed" or "competition" (for the lack of a better word). Only the most attractive plants get pollenated, only the most attractive animals get to reproduce (I use the term "attractive" very loosely here). Blame it all on the flower, according to scientists life on earth took off after the flower evolved. Greed/Competition is the core problem of our whole existence, but without it we all die. In nature it is also true, make it better, faster and cheaper and you will beat your competition.
To those who are "going to profit" while others are dying of starvation: The rich need the poor and vice versa, it's a symbiotic relationship. The poor need the rich to provide "jobs" so that they can live. The rich need the poor to buy their goods and services from the wages they received from working. What's going to be interesting is when all the entire world is developed and we don't have any more cheap labor.
Business always looks for cheap labor. Maybe that's why Honda created ASIMO? Perhaps the Matrix movies have it right. Humans will create machines to do all their "work" and become complacent. Computing power is ever increasing, here is an article from the San Francisco Chronicle's website:
The scary part is that usually the computer is right in it's speculations. What if the computer predicts the ultimate demise of the human race? What will Wall Street do then? Artificial Intelligence and machines will merge creating a new "species" that will overpower the humans. Has anyone ever heard of the "Gigapet"?
Isn't raising cattle for energy (food is energy consumed by us humans) the same concept as the Matrix? One species takes advantage of another? Is this going to be the next step in Evolution? Perhaps man and machine fused together (just Google biotechnology or nanotechnology) is the future? We are already going down that path with Titanium hip replacements and experimental "brain chips" that will send the neuro signals across severed nerves wirelessly so that a parapalegic can walk again (I'm waiting for this to happen, a good friend of mine had a freak occurence that left him paralyzed at the age of 40, www.neighborbill.com) to name a couple examples.
What I see is human nature, people don't act, they Re-Act to whatever emotion stirs them at the moment. The same happens in the world markets, it also happens in forums such as these. How many posts are in defense of someone's words or posts? Look at the title of this thread. Americans will never be banned from overseas oil trading...we depend on importing oil. This is a knee-jerk re-action to emotion.
What needs to happen is a fundamental change in human attitude towards life. Once a utopian state is reached where all basic human needs (water, food, shelter, and clothing) are met then we as a collective (sounds like the Borg) will be able to go to the stars. Spaceship Earth only has so much "gas"...if the Human Species is to survive we need an "exit" or "expansion" plan off of this rock. I guess this is when man evolves to "god".
John Lennon, here's to you, "Imagine all these people..."
Joined: Sep 03, 2007 Posts: 560 Location: Sunny Virginia, USA
Posted: Fri May 09, 2008 5:15 pm Post subject: Re: Americans to be banned from overseas oil trading
vaseline2008 wrote:
About Government Regulations: We need them, period. How about we make murder legal? How about speed limits? Anyone who thinks that the US has "too much" government regulations and interventions, please move to Zimbawe or anywhere else in some 3rd world country...they don't have a lot of government breathing down your back as long as you have $$, hell you can even get into the Human Slave Trade too if you like (anyone who thinks that Slavery does not exist in the world needs to get their head out of the sand).
I'm sorry you feel this way. As a Libertarian I strongly support a government that protects my rights. Murder is wrong, slavery is wrong, fraud is wrong as each violates the rights of someone. However, I strongly oppose a government that tells me what I can and can't spend my money on. I also oppose a government that controls my business with regulations that have nothing to do with protecting the rights of others.
Perhaps there is something we've all missed and need to consider. Why does the futures market exist? Is it designed to provide a basic function that gives us the fairest price? Was it created just to provide another financial scheme for brokers? If the latter question is yes, then perhaps the futures market is simply a fraudulent market after all. I know what it's supposed to do, but is it doing it?
Quote:
Once again, follow the money. As mentioned previously, when there is a trade there is a buyer and seller. Someone is going to lose, right?
If I buy something at a price that I deem fair and you are selling it at a price you deem fair, how is someone losing? If the price goes up or down after the transaction, that is not a loss or gain, per se, but fluctuations of the market. It is only harmful to a buyer if there is someone controlling the market, say like a monopoly or oligopoly.
Oh yeah, OPEC. Forgot about them. Quotas, all that stuff. No free market there. Hmmm... so it sounds like we have a free market facade on top of a controlled market... that doesn't sound right.
Quote:
Here's why: In an inflated Bull Market, the last guy who is selling is probably selling at a profit so the "loser" is going to be the last guy to buy. When the music stops, the bubble bursts. Once the bubble (price bubble, not supply) bursts whoever is holding Call contracts in excess of the spot price is going to lose their open interest money (margin maintenence) or won't be compensated for the contracts that were purchased.
In the futures market, you are buying and selling promises to deliver a certain product at a certain time. Speculators who are in the market close to the closing date are playing with fire as they will have to take delivery (and pony up a bunch of money) if they fail to get rid of the contract. That's why many times you will see prices falling the closer you get to the close of a contract. Speculation only goes so far and if I'm just playing the market, I'm going to unload that contract at whatever price I can get if I get to close to the contract's close. This is fundamental to how the futures market works.
Keep it and accept delivery (get) or provide product (put). A long and short position simply states in what direction you think the market is going to go. Is it possible to affect the market from by placing large purchases of options? Sure, and it's a great way to lose money also.
Quote:
Sound kind of familiar to anyone in the Real Estate Market? Short term contracts (aka Adjustable Rate Mortgage) are a gamble or at best "insurance". Sure they are great when things are moving in the upward direction but as the saying goes, "what goes up must come down", hence our "Peak [fill in the blank]" theory.
Idiots playing with fire. Here there was no option but actual product being purchased and sold. Here there was near-fraud occurring but in actuality I've seen it so far as a bunch of morons playing Russian roulette with 5 chambers loaded. I can't help it if people are stupid and I don't think we should bail them out for their idiocy.
No on the securities side... THAT WAS FRAUD... plain and simple and it is not surprising to me that the current administration is doing little more than sweeping it under the rug at tax payer's expense. The real criminals are in Washington for allowing this to happen and then not punishing the evil bastards afterwards. So, perhaps the current administration is evil also? Greedy as hell!
Yep, trust government! They're on your side!
Quote:
Remember all the talk about reforming the Mortgage Industry? Only thing that I know is that the banks aren't lending as much anymore. This is just more of the same.
Again, your government at work! Trust them, they know best!
Quote:
Now, with that said, who is really making the money? The exchanges...they get a fee no matter what happens. Anyone who plays poker knows that the Casino takes a "Rake". This is the "fee" that the Casino "charges" the players at the table for use of their facility and furnishings. It doesn't matter who is the winner, as long as they get their's. I have a friend who is a "bookie" and he doesn't care what his clients bet on...if they lose the "juice" starts running and he makes 10%. He tells me that all I need is about 3 clients who bet a lot and I can quit my day job. He relies on his clients to lose money! Money makers don't care how...just make it.
Yep! That's it! It's the exchanges that are causing the problem! Heck, those $6 trades on a $60,000 purchase really make things roll! Puleez! That is one of the things that have improved over the years. When I was making trades in the 80's, it could cost several times more than $6 to make a trade.
Quote:
Funny thing is that the NYMEX stock (NMX) is down from it's inception: From $132.99 down to $93.04 today in spite of profits and growth.
Here is a story from 12/07 that WSJ had posted about NYMEX's 87% increase in contracts from the same time 1 year ago.
I don't know about you, but if GM had an increase of 87% in sales (and assuming profit too) wouldn't everyone on Wall Street buy GM stock and make the price go up? Why NMX stock hasn't taken off is beyond me, their profit margin is 33.28%. Google's profit margin is 24.89% and their stock is $500+.
??? The point is excatly what?
Quote:
I don't think this whole mess is the work of just one individual or small group (manipulation). Tt's the culimination of de-regulation and an overabundance of wealth. Don't get me wrong, I'm all about business, I own my own business but we as reasonable humans should think twice about the "necessities" of life. People are dying of starvation as we speak (and eat our steaks and potatoes) aroung the world not because of a shortage of food but because of the shortage of "money" to purchase it.
And perhaps the freedom to pursue that money. Check out the places where it's the worst. You might find a lack of capitalism and freedom. We have money because we're allowed to keep at least half of it (usaully).
Quote:
Perhaps this is the evolutionary process where only the strong survive, but is this the road that we want to go down? Imagine the next evolution of man: Average IQ is 145, height 6', weight 200lbs. Sorry to say but Hitler had the right "Idea", just not the right approach. It is proven that through selective breeding we are able to speed up the evolutionary process. Perhaps there will be two sets of the species, homo sapien and homo suprasapien.
Or Homo Superior if you're an X-Men fan.
Quote:
If peace begets peace, doesn't greed beget greed?
Of course! If greed (which is simply an extreme form of self interest) is allowed to flourish, it will create more greed.
I believe fully in self interest, I eschew greed. Greed is destructive and leads to all sorts of violations of rights while self interest is required for self preservation.
Quote:
Someone mentioned that "greed" is not against the law, that is not true, there are government limitations everywhere in our lives that try to "control" greed. Can't have more than one wife, right? Can't be "greedy" and have two (or more).
You make a basic mistake here in stating that emotions are illegal. Thinking is not illegal and is one of the only things the government can't control (yet). The actions you take may be illegal. If I'm greedy, but well adjusted, I won't get into trouble. If I'm greedy and allow that greed to control my actions, I may get into trouble.
Quote:
Nature is based on "greed" or "competition" (for the lack of a better word). Only the most attractive plants get pollenated, only the most attractive animals get to reproduce (I use the term "attractive" very loosely here).
You are mixing up self interest, competition and greed. Animals typically don't feel greed and flowers certainly do not. You are claiming that natural selection is based on greed? I'm sorry, no sale here.
Quote:
Blame it all on the flower, according to scientists life on earth took off after the flower evolved. Greed/Competition is the core problem of our whole existence, but without it we all die. In nature it is also true, make it better, faster and cheaper and you will beat your competition.
Again, mixing greed with other things. Competition is good as it tends to lower the price and maintain service or quality. Without getting into the overly simplified "Walmart sells Chinese crap" argument, which holds little water, competition is required to provide the best service for the best price.
Quote:
To those who are "going to profit" while others are dying of starvation: The rich need the poor and vice versa, it's a symbiotic relationship. The poor need the rich to provide "jobs" so that they can live. The rich need the poor to buy their goods and services from the wages they received from working. What's going to be interesting is when all the entire world is developed and we don't have any more cheap labor.
Again, blame the dictators and power groups that oppress the citizens of the countries with the worst problems. Please, are there any democratic free market countries with masses of starving people or huge problems with hunger?
No? Dang, perhaps the system works after all when it's allowed to work.
Quote:
Business always looks for cheap labor.
Wrong, business is always looking for ways to cut costs from the system... labor is one of those costs. But if you have a worker making $30 an hour who can profitably outperform a worker who get's paid $2 and hour, you stay with the $30 per hour worker.
Quote:
The scary part is that usually the computer is right in it's speculations. What if the computer predicts the ultimate demise of the human race? What will Wall Street do then? Artificial Intelligence and machines will merge creating a new "species" that will overpower the humans. Has anyone ever heard of the "Gigapet"?
When computers get self mobile and can build themselves, that's when I'll start to worry. In the mean time, I always want to know where the off switch is.
Quote:
Isn't raising cattle for energy (food is energy consumed by us humans) the same concept as the Matrix? One species takes advantage of another?
<sigh> Boring.... PETA argument... non sequitor... cattle are a domesticated food source.
Quote:
What I see is human nature, people don't act, they Re-Act to whatever emotion stirs them at the moment. The same happens in the world markets, it also happens in forums such as these.
And those that act get ahead... hmmmm... perhaps you've hit on the real problem... people who plan ahead and make moves forcing (or enticing) others to react.
Quote:
How many posts are in defense of someone's words or posts? Look at the title of this thread. Americans will never be banned from overseas oil trading...we depend on importing oil. This is a knee-jerk re-action to emotion.
Spot on.
Quote:
What needs to happen is a fundamental change in human attitude towards life. Once a utopian state is reached where all basic human needs (water, food, shelter, and clothing) are met then we as a collective (sounds like the Borg) will be able to go to the stars. Spaceship Earth only has so much "gas"...if the Human Species is to survive we need an "exit" or "expansion" plan off of this rock. I guess this is when man evolves to "god".
Let me know how that works out for you. _________________ When somebody makes a statement you don't understand, don't tell him he's crazy. Ask him what he means. -- Otto Harkaman, Space Viking
Posted: Fri May 09, 2008 9:25 pm Post subject: Re: Americans to be banned from overseas oil trading
kublikhan wrote:
cube wrote:
There is a bull market in commodities right now and there is absolutely nothing that the government or all the (pro-government economic interventionists people) of the world can do anything to stop it.
if the FED started raising interest rates that would take the steam out of this commodity bull market.
ouch! okay I admit it, you got me there.
Lets go back in history and look at the price of gold for example
and here's the federal funds rate
Paul Volcker back then raised the federal funds rate and that basically put a stop to all the hot money. However thats like cutting with a broad sword. Everything was effected! Stocks, real estate, you name it. However that will never happen in today's environment. Politically speaking it would be impossible to raise interest rates. When I said government doesn't have the power to stop a bull market I guess technically speaking I am wrong. Yes government does have the power but only at great cost.
If you really want to see the real estate market crash then increase the interest rates up to 18%
However this is a completely different action then what threadbear and Johndenver is advocating. They are advocating capital controls and not a contraction of the money supply.
Posted: Fri May 09, 2008 11:06 pm Post subject: Re: Americans to be banned from overseas oil trading
threadbear wrote:
...
I don't think you get what I'm saying and have said repeatedly...as long as demand remains relatively strong, globally, there will be a bull market. I'm questioning how much of the strength comes from the core problem with supply and how much of that effect is exaggerated by excessive money flows ramping up price. I could be overestimating speculation. Time will tell.
...
let me tell you a story:
When I first left college my entire belief system was basically a carbon copy of what my professors taught me. My first jolt, wake up call, or whatever you want to call it came while observing stock prices during the dot com boom. How do you explain stocks with PE ratios of triple digits coming from companies that produce no profit! Conventional economic theory taught in school cannot explain why the hell does the market do that? You know why? The market is irrational because people are irrational. These market fluctuations which sometimes seem to have no rhyme or reason are perfectly normal. Basically it's normal for the market to act abnormal if that makes any sense. Sometimes crude oil will drop in price after a hurricane rips through a bunch of off shore oil platforms and there's war in the middle east like in 2005. Sometimes crude oil will skyrocket in price: no disasters, no war, no terrorist bombings, nothing ---> sometimes it just has a mind of it's own like in 2007. If the market was perfectly logical then someone would build a computer to play the market and we could all get rich quick and easy.
Sorry folks there is no conspiracy theory here.
What we have here is an increase in enthusiasm for commodities which is no different then the stock market during the dot com years or real estate previously. That does not mean there is some type of "coordinated effort" by speculators. Is this enthusiasm unjustified? I don't think so. It's not our fault (me and all the other speculators) that the US government can't keep it's financial house in order. Ever heard the joke:
"Gold did not go up in price. The US dollar just went down."
///
Do you know what would happen if JD's proposals were put into place? All the day traders of the world would short the US dollar and commodities would sky-rocket even higher! Once a government imposes capital controls; it is an admission that its currency is weak and therefore cannot stand on it's own. And if government admits that, then why would you hold onto the currency?
If you want to see the Euro become the next world reserve currency then I recommend implementing JonhDenver's proposals.
Joined: Apr 09, 2007 Posts: 4860 Location: Alaska (its much bigger than Texas).
Posted: Sat May 10, 2008 12:17 am Post subject: Re: Americans to be banned from overseas oil trading
cube wrote:
What we have here is an increase in enthusiasm for commodities which is no different then the stock market during the dot com years or real estate previously.
Yes there are differences.
People buying stocks or multiple condos and holding them for the sole purpose of flipping them at higher prices is rather a different process from people buying oil, corn, wheat, steel and other commodities and then burning, eating, or otherwise consuming and destroying the commodity to stay alive and keep their economies going.
The continuous consumption and destruction of commodities results in a very real and very continuous level of "demand" for ever more commodities that doesn't exist for stocks or for investment real estate. The existence of huge, rapidly growing economies in China and India that demand ever more commodities each year puts a very real and very continuous pressure on the supplies and price of oil and all other commodities.
Joined: Sep 03, 2007 Posts: 560 Location: Sunny Virginia, USA
Posted: Sat May 10, 2008 6:41 am Post subject: Re: Americans to be banned from overseas oil trading
Plantagenet wrote:
cube wrote:
What we have here is an increase in enthusiasm for commodities which is no different then the stock market during the dot com years or real estate previously.
Yes there are differences.
People buying stocks or multiple condos and holding them for the sole purpose of flipping them at higher prices is rather a different process from people buying oil, corn, wheat, steel and other commodities and then burning, eating, or otherwise consuming and destroying the commodity to stay alive and keep their economies going.
The continuous consumption and destruction of commodities results in a very real and very continuous level of "demand" for ever more commodities that doesn't exist for stocks or for investment real estate. The existence of huge, rapidly growing economies in China and India that demand ever more commodities each year puts a very real and very continuous pressure on the supplies and price of oil and all other commodities.
Well, you are both right but I think Cube was trying to say that the fact that there is a run up is quite explainable, based on past markets, by looking at emotional factors. A significant portion of the price is emotion and concern for wealth maintenance (let alone creation).
You, Plantagenet, are very right in pointing out that while the condos market may rise, it typically does not have the "legs" that commodities have as condos do not typically get destroyed, but simply turned over. The demand is much lower and people can easily live without condos.
The commodities market has been seeing a run up in price due to, in part, EOTWAWKI concerns. While I do not subscribe to the 60% of oil price is speculation, I would accept that 30% or so is speculation. On the other hand, Metals are somewhat more like condos in the "human need" aspect and the prices are probably 60% speculation.
I sometimes daydream that 90% of the gold and silver price is speculation and that the bubble will burst big time before the end of the year. After which I will back my car up to the nearest refinery and load my trunk up on $4 silver. I may not need silver to live, but I sure has heck could live better right now if I had a lot of it. _________________ When somebody makes a statement you don't understand, don't tell him he's crazy. Ask him what he means. -- Otto Harkaman, Space Viking
Joined: Apr 06, 2006 Posts: 2620 Location: 3 miles NW of Champoeg, Republic of Cascadia
Posted: Sat May 10, 2008 7:44 am Post subject: Re: Americans to be banned from overseas oil trading
Moe Gamble at TOD provided a pair of documents that show quite clearly that there is no correlation between futures trades and the price of oil. Here is a link to the discussion where he provided them.
Figure 4 below plots the net long-termpositions of non-commercial traders and the spot price. From this graph, it is possible to make three broad generalizations. First, prices appear to be less volatile than speculative positions. Second, there is no common trend between prices and speculation.
Looking at the trends in the marketplace, combined with studies on herding behavior and the impact of speculators in the markets, there is little evidence that changes in speculative positions are systematically driving up crude oil prices.
Believing that speculation is the root cause of price shocks is, I believe, a convenient myth to those who refuse to countenance the idea that we are facing supply constraints, even if one also believes they are temporary, and that we are simply waiting for KSA to pump 12.5 mbpd like they promised.
Moe Gamble wrote:
Also, speculators have always been, and remain, a small percentage of the market. The commercial traders are roughly 80% of the oil market, and believe me, speculators can do nothing to influence price if commercials jump on a high price and start selling. Commercial selling steamrolls speculators flat.
Saudi Arabia and the oil companies are blaming speculators for high oil prices to ward off attention to the real issue--commodity supply and demand imbalances. They are lying, and they know they are lying; it's a propaganda campaign to keep the masses from the truth. The media reports their lies without question, either because they're in on the propaganda campaign, or because reporters are too lazy to do their homework.
In defense of reporters I'll admit that it is very difficult to find even basic information on this. _________________ Cogito, ergo non satis bibivi
The god damn plane has crashed into the mountain!
Joined: Sep 03, 2007 Posts: 560 Location: Sunny Virginia, USA
Posted: Sat May 10, 2008 9:06 am Post subject: Re: Americans to be banned from overseas oil trading
TheDude wrote:
Economists in WSJ poll:
Stop it, Stop It, STOP IT!
If you start spreading facts around, then you're just going to confuse people! _________________ When somebody makes a statement you don't understand, don't tell him he's crazy. Ask him what he means. -- Otto Harkaman, Space Viking
Posted: Sat May 10, 2008 9:29 am Post subject: Re: Americans to be banned from overseas oil trading
TheDude wrote:
Economists in WSJ poll:
You have demand and supply constraints accounting for only 60% of the price run-up. Everything else on that chart could be remedied by swift govt action. Cutting subsidies for corn, raising interest rates-- which would be one way of curbing speculation, and restoring foreign exchange balance.
So speculation and central bank policy are inextricably linked here, and account for 20% of the price, alone, and that is likely conservative.
The Oil Drum is a haven for specialist nerds, many of whom overemphasize the dynamics of geologic peak, and underemphasize other variables. Because they use techno-geek speak and have the attitude of oracles, preaching to the ignorant masses, they get more respect than they likely deserve. Their site, is, for the most part, an appalling mass of dense arcane minutia, where "experts" can throw hissy fits over detail. It's like watching a bunch of little old ladies crochet themselves into a tangle of gibberish.
Posted: Sat May 10, 2008 10:14 am Post subject: Re: Americans to be banned from overseas oil trading
[quote="Plantagenet"]The dems in Congress believe high oil prices are due to "speculators" and not to supply and demand issues.
Seems the oil exchange market is contingent on speculators for driving prices in on direction or the other, yet, if the government steps in to put a restraint on the speculators emotional drives, then there will most likely be a "settling" of oil barrel prices to a sustainable level.
Joined: Apr 06, 2006 Posts: 2620 Location: 3 miles NW of Champoeg, Republic of Cascadia
Posted: Sat May 10, 2008 10:40 am Post subject: Re: Americans to be banned from overseas oil trading
threadbear wrote:
TheDude wrote:
Economists in WSJ poll:
You have demand and supply constraints accounting for only 60% of the price run-up. Everything else on that chart could be remedied by swift govt action. Cutting subsidies for corn, raising interest rates-- which would be one way of curbing speculation, and restoring foreign exchange balance.
So speculation and central bank policy are inextricably linked here, and account for 20% of the price, alone, and that is likely conservative.
Not going along with you on this one! OPEC putting a million barrels extra on the market per day is worth more than the hedges combined assets a couple times over, whereas the futures activity seems like mere aimless chaos that doesn't correlate to anything much. But would like to see a dedicated analysis of the situation in toto. Might try and graph price vs. futures activity myself when I get a chance.
Quote:
The Oil Drum is a haven for specialist nerds
I know - what a great site!
Quote:
many of whom overemphasize the dynamics of geologic peak, and underemphasize other variables.
The converse is true too.
Quote:
Because they use techno-geek speak and have the attitude of oracles, preaching to the ignorant masses, they get more respect than they likely deserve. Their site, is, for the most part, an appalling mass of dense arcane minutia, where "experts" can throw hissy fits over detail. It's like watching a bunch of little old ladies crochet themselves into a tangle of gibberish.
Again - If the quality of their discourse is appalling, what do we have going here? Come on, do tell! From one "Expert" to another.
You have dorks over there espousing contrary attitudes too - contrary to the supposed notion that things like biofuels are a closed case, that is. I welcome any and all nerds, myself. Y
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